For both domestic and foreign companies, hiring and retaining good employees in China is difficult. In fact, this may be the biggest hurdle facing most operations there. Adding to the challenge is the entry into the workforce of China’s “Generation Y” or “80 hou,” those born in the 1980s and raised in an era of relative affluence.

With the economy once again booming and labor market conditions relatively tight, 20-somethings with just a few years of work experience are in strong demand. What is the best way to attract and hire this new breed of Chinese employee?

Interview Methods Differ

Multinationals in China have developed unique tests and interview methods to identify good job candidates and retain them. A Japanese automaker, for example, uses a test to determine how applicants eat, favoring candidates who disregard instructions to eat slowly and bolt down their food. Those who eat more quickly are thought to have strong stomachs and digestive systems, and be in better health. Fast eaters, the theory goes, can complete work quickly and are more mentally acute.

A Taiwanese food maker employs a test that requires job applicants to clean toilets, observing whether potential hirees are willing to tackle the task with zeal and sincerity. Those who balk at the request are eliminated. Why? The company prefers employees who recognize they must work hard and accept whatever is required.

Our firm, InterChina Consulting, uses the Skills, Motivations and Commitment (SMC) method to determine which applicants to hire after testing and interviewing. While the various tests noted above are creative and have a purpose, InterChina believes the SMC test identifies the best talent.

A Case in Point

A leading European pharmaceutical group establishing a global R&D center in Shanghai sought InterChina’s help to fill a vital position. The job required both specialized expertise in the area of generic drug R&D and overall plant management skills.

Since the first step to successful hiring is to accurately understand what the employer is seeking and to define the background and requirements of the position, for this client we determined the candidates should possess the following main attributes: generic drugs R&D experience, expertise in Active Pharmaceutical Ingredients manufacturing, proven plant management skills, a wide working knowledge of regulatory trends, GMP standards, FDA and ICH guidelines, excellent English skills and international work experience. Finding a recruit possessing this mix of general and specialized skills plus experience was bound to be a challenge.

To attract the widest possible range of qualified candidates, we advertised the position on the Internet, sought referrals and searched databases. Despite the potentially large pool of qualified candidates, we initially failed to attract a strong response. Eventually, however, we managed to identify 10 potential candidates, though several problems emerged when we approached them.

In China, most of the general managers of pharmaceutical R&D centers are expatriates. Since this is a senior level position, most tend to be quite stable and loyal to their companies. Plus, most are satisfied with their remuneration and career opportunities, and are generally unwilling to change jobs. In addition, about 90 percent of Chinese nationals working for Chinese companies in top management positions have sound experience in generic drug R&D and overall management skills. However, most do not have a good command of English or international work experience. This posed a problem.

InterChina found that Chinese returnees from overseas were the best candidates for the position due to their global experience and sound language skills. Plus, many were keen to return to China and, compared with expats or non-Chinese applicants, they remain highly motivated and committed to helping Chinese companies grow.

Considering the interests of the client and candidates, InterChina identified and interviewed potential candidates, utilizing an exhaustive but highly successful SMC process. And after a candidate was selected, InterChina also helped the candidate adapt to the client’s corporate culture, rules, regulations and role in the company. Our SMC method proved useful in many other cases.

Background Checks

In China, people tend to exaggerate their backgrounds, abilities and experience. Fake university diplomas and other certificates are easily available. As a result, background checks are important steps in the selection process that should not be neglected.

In our process, we verify at least three referrals among a candidate’s past three employers (we do not call on the current employer in order to ensure the candidate’s confidentiality). In doing so, we explore the candidate’s position, duration of employment, last month’s salary, duties, and reason for leaving, as well as the seniority level of the immediate supervisor, those supervised, and whether or not the candidate was promoted or given a raise.

In addition, we ask referrals to score each candidate on his or her knowledge of the previous position, performance, communications skills, organizational skills, attitude and conduct, relationship with others, and ability to work in teams.

Negotiating Salaries

On behalf of the client, InterChina also negotiates salaries. As such, we identify industry benchmarks for the position at hand and review salary reports from third parties such as Hewitt, as well as help determine the candidate’s employment package, discover the candidate’s expectations and evaluate whether they are realistic and consistent with industry levels. We also propose and gain client approval of a package, and reach an agreement with a candidate on the total package.

In one case, a North American auto parts maker was seeking a deputy managing director for its plant in Wuhan. After we completed our search and interview process, the client selected a candidate and made an offer. Since Wuhan was a new tier-2 city for us, we had little knowledge of local salary levels. As a result, we studied local benchmarks for similar positions. Apart from second hand research, we also reviewed data with the local HR association and found that salaries for top management positions in Wuhan, especially in the auto sector, were very close to those in large cities, like Shanghai and Beijing.

After gathering additional data, we proposed a budget for the position which the client approved.

Different Approaches Work

Noted above, there are various techniques one can use to identify and interview the best job candidate for one’s company. Some use in-house HR departments or engage the services of an HR company or headhunter. Cisco, which is expanding its China staff by 60 percent, recruits 40 percent of its staff through headhunters. It also encourages internal staff to recommend candidates and rewards them based on a successful hire.

The bottom line: creativity is key. In the hiring process, companies need to adopt a range of strategies while considering important guidelines as they hunt for the best talent available in China’s challenging market.